China Roundup: Tech giants take stance on Beijing’s data control in Hong Kong

Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.

This week, the unprecedented national security law descended on Hong Kong, changing the day-to-day life of the people there, as well as businesses across the board. The law has important implications for the tech sector, providing a litmus test of business sentiment towards China’s regulation over information. Google, Facebook, Twitter, Telegram, Zoom, Reddit among a roster of companies have come to voice their stance.

Resist, comply, avoid

The Hong Kong national security law that went into effect on July 1 is set to tighten Beijing’s grip over the city. A few provisions of the law directly request service providers to remove information or provide assistance to the police, as I wrote earlier. Here are what the tech giants are saying in response:

Facebook confirmed it has paused the processing of data demands from Hong Kong authorities until it can better understand the law, “including formal human rights due diligence and consultations with human rights experts.” Its spokesperson said: “We believe freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions.”

Its suspension will also apply to WhatsApp, which it owns.

Twitter said it suspended transfers of user data subject to Hong Kong demands immediately after the law went into effect, and its teams are “reviewing the law to assess its implications, particularly as some of the terms of the law are vague and without clear definition.” It also said it has “grave concerns regarding both the developing process and the full intention of this law.”

Google said it suspended its reviews of data requests from the authorities. It added that it would continue reviewing government requests for removals of user-generated content from its services.

Zoom said it suspended its compliance with data requests from the Hong Kong authorities. “Zoom supports the free and open exchange of thoughts and ideas… We’re actively monitoring the developments in Hong Kong SAR, including any potential guidance from the U.S. government. We have paused processing any data requests from, and related to, Hong Kong SAR.”

LinkedIn, which is owned by Microsoft and runs a separate mainland beholden to Chinese regulations, said it is pausing responses to local law enforcement requests as it conducts its review of the law.

Telegram said it does not intend to process any data requests related to its Hong Kong users until an international consensus is reached in relation to the ongoing political changes in the city. Its spokesperson claimed it has not disclosed any data to the Hong Kong authorities in the past.

Signal, a competitor to Telegram in the realm of data encryption, tweeted a snarky comment: “We’d announce that we’re stopping too, but we never started turning over user data to HK police. Also, we don’t have user data to turn over.”

TikTok is in a dilemma. As a Chinese-owned company, it can’t choose to defy the Chinese government. On the other hand, it can’t afford more narrative about it being a tool of Chinese censorship. Instead of temporarily refusing data requests from the police like many foreign firms, which is regarded as a gesture of opposition to Beijing’s grip, the short video app decided to quit Hong Kong. It’s an easy business decision, as the city constituted only a tiny share of TikTok’s user base. Time will tell whether ByteDance will roll out a censored version of TikTok — Douyin — or leave the city of seven million people out.

Apple has long been criticized for its closeness to the government of China, where it has significant business. Last year, it pulled a map that pinpointed pro-democracy demonstrations in Hong Kong.

Following the enactment of the security law, Apple announced it is assessing the rules, adding that it does not receive requests for user content directly from the Hong Kong government and requires authorities to submit requests under a U.S.-Hong Kong legal assistance treaty.

Reddit, which counts Tencent as an investor, provided a more evasive response: “All legal requests from Hong Kong are bound by careful review for validity and with a special attention to human rights implications.”

The list is not exhaustive and many aspects of the national security law await further explanation. We will keep tracking how other tech companies cope with the city’s new rules.

In response to tech firms pausing data compliance to the police, China’s Foreign Ministry Spokesperson Zhao Lijian tried to allay concerns in a statement:

“I recall what Deng Xiaoping noted in 1982 when he met with Margaret Thatcher, after Hong Kong’s return to the motherland, ‘Horses will still run, stocks will still sizzle, and dancers will still dance’ in Hong Kong. We have every reason to believe that as the Law is implemented, the foundation of ‘one country, two systems’ will be further strengthened, the Hong Kong residents’ fundamental interests and wellbeing will be better protected, there will be greater social stability and harmony, and ‘horses will run faster, stocks will be more sizzling, and dancers will dance more happily.’ We have full confidence in Hong Kong’s future.”

Elsewhere…

  • The U.S. threatens to ban TikTok over concerns that it could be used by the Beijing government as a surveillance and propaganda tool.
  • In a race to lead the global semiconductor industry, Chinese chip companies have fundraised more than twice as much in 2020 than in all of 2019.
  • The U.K. is poised to begin phasing out Huawei technologies in the country’s 5G network as soon as this year due to security fears. The decision reversed a previous plan to keep Huawei in the nation’s telecom infrastructure on condition of tight restrictions.
  • Weibo is becoming a closed ecosystem. The biggest microblogging platform in China announced it will only accept shortened links that it authenticates. Keeping a whitelist, it said, will help clamp down unsafe sites such as illegal gambling and porn services. Meanwhile, users worry this is a slippery slope that leads to another walled garden on the internet. The platform allows four types of short links, including a pre-select list of official websites operated by government branches, media, news portals, as well as business websites vetted and approved by Weibo.

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